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High Balance Mortgage Loans

High Balance Mortgage Loan

High balance mortgage loans create affordable options for high cost areas. Loan limits are set by the Federal Housing Finance Agency annually and mortgages can be for conventional or government loans. If you want to buy a home in a location where properties exceed the loan limits set by the Federal Housing Finance Agency, call us, our high balance mortgage loan could be the perfect solution for you. Horizon offers high balance loans for conventional and government mortgage loan programs.

Conventional High Balance Loans

Fannie Mae and Freddie Mac began offering high-balance loans on a county-by-county basis in 2008. The home had to be located in a recognized high-balance mortgage county. If the home is not in an approved county, it does not qualify for a high-balance loan. The maximum loan amount for a single-family home through the high balance mortgage program is $729,750 in the continental United States. In Alaska, Hawaii, Guam and the U.S. Virgin Islands, the maximum high-balance loan amount for a single-family is $1,094,625. These loan maximums are temporary and may expire in the future.

FHA High Balance

FHA also provides a high-balance mortgage program similar to the conventional high-balance mortgage loan program. This also is set up on a county-by-county basis. FHA has long set loan amounts based on a county-by-county basis. Some states, like Iowa, have one loan limit for all counties. Other states, like Colorado, have maximum loan limits ranging from $271,050, FHA's lowest maximum loan amount, to $729,750. FHA loans require both an up-front mortgage insurance premium and monthly mortgage insurance premiums on all loans, unlike conventional high-balance loans.

Avoiding a High-Balance Mortgage

High-balance mortgage loans often require higher interest rates and stricter approval guidelines than conventional loans. If you can avoid having a high-balance mortgage, you may save money on your mortgage each month. One way is to explore having a second mortgage along with a conventional first mortgage. The first mortgage lender's maximum loan amount only applies to the loan they provide; the lender does not count the second mortgage's balance in the maximum loan amount calculation.

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